Five reasons why companies should be worried about click fraud

People buy more things online than in person these days and online paid advertising budgets have gone wild for the feeding frenzy.

With so many companies trying to cut through the noise, the online advertising space has become a rather cut-throat arena. Brands jostle for attention but a new flank in this online conflict revolves around the marketing equivalent of hand-to-hand combat.

In the last couple of years there is one underhand tactic that has spiralled out of control - and it’s ‘click fraud’.

This practice of repeatedly clicking on competitors’ paid adverts until their marketing budget runs down and their adverts disappear is hobbling small to medium size enterprises and hampering large firms alike.

While on the face of it this might not spell doom and disaster for companies, if employed effectively, it can mean the difference between turning a profit or pouring thousands of pounds down the drain.

The problem is that click fraudsters don’t have to be sophisticated to inflict serious financial damage - so here are top five reasons you should act against this scam now:

This is costing businesses thousands

As businesses of all sizes attempt to shout above the online din, companies are spending big money on pay-per-click ads designed to dent the competition.

But it is smaller businesses - such as emergency tradesmen, home improvement companies and occasional use trades - that are more likely to turn to paid advertising as a means to stand out above this cacophony.

It’s also these sectors that are most likely to see a higher incidence of click fraud. Our research has revealed locksmiths are the worst hit with up to four in 10 of their paid adverts falling foul of click fraud, closely followed by the likes of cleaning companies and investment firms.

In these sectors, the monthly spend on advertising can be as much as £5k, which means £24,000 worth of ads are disappearing every year, before prospective customers ever get a chance to see them - something which companies, and especially bootstrapping businesses, can barely afford.

Beware the vicious cycle

While click fraud can cost you buckets in the short-term through wasting your marketing budget, it can also artificially inflate the cost of keywords i.e. the terms or phrases you’re using to make your marketing campaign standout on Google. As ads get more fraudulent clicks, the cost of their linked keywords can rise because it looks like they are growing in popularity.

In the long run, that means click fraud can cost you more and more money over time if it is not tackled properly.

In this sense, click fraud can be thought of as a pincer attack - designed to initially deplete your resources but also make it harder to fight back too.

It’s not always that easy to spot

Those with a decent handle on Google Adwords might consider themselves equal to the challenge of click fraudsters. Repetitive activity from one IP address is a dead give away - and those IP addresses can then be blocked - or excluded. It’s also easy to spot unusually high spikes in activity through your Adwords dashboard. However, it’s harder to track more sophisticated attacks.

Competitors, for example, can hire entire banks of workers in so-called ‘click farms’ to falsely exhaust your marketing budgets in a matter of seconds. Then there are those who use VPNs - Virtual Private Networks - and proxy software to artificially move their IP addresses around, making them hard to spot.

While keeping an eye out for trends can be a good way to stay ahead of less advanced click fraud, most businesses should consider paying for another layer of protection against the assaults that they are less likely to spot through a cursory look at their Adwords dashboard.

You can’t rely on Google to catch fraudulent activity

There’s a misconception among businesses that platforms like Google Adwords will catch and stop fraudulent activity for you. While Adwords does have its own invalid click department, it won’t actually stop the fraud.

It is sometimes said Google has no incentive to stop click fraud because it makes more than 90% of its revenue through paid search.

That may be a little unfair but it is worth noting, however, that Google’s click prevention system lacks the nuances of other made-to-measure platforms. Google, for example, doesn’t give businesses the autonomy to choose when you exclude certain IP addresses - in some industries, you might want to allow two clicks before a block is issued, in others five. In this sense, Google’s tools are a bit of a blunt instrument when often a more refined system is needed.

No campaign is too small to be targeted

While smaller PPC campaigns are more likely to fly under the radar, all it takes is a competitor to spot one of your ads and click it, and that’s money poured down the drain.

It’s wrong to think, as a smaller business, you are less susceptible to click fraud. As our research shows, enterprises with one or two staff such as plumbers, cleaners and van drivers are among those hardest hit by the practice - typically because there’s more competition from a large number of small outfits.

With the cost-per-click of some ads ranging between pennies and tens of pounds, just a click per day from a rival can significantly add-up over time. Don’t fall foul of the belief that your campaign is simply too small to fail.

With the number of incidences of click fraud on the rise, business owners of all sizes need to be mindful of the fact that their advertising campaigns could be targeted by rivals out to cut down their online presence and hamstring their budgets.

While DIY methods of stopping fraudulent activity can be a decent first line of defence against competitors, it’s worth weighing up whether a prevention service could give you peace of mind as the latest battleground for share of voice on the internet continues to spiral out of control.